With life moving so quickly, changes in technology happening so fast, and complexity, how can companies keep up? The most recent solution seems to be collaborating with your competition. United we stand seems to be the new rule of thumb when it comes to industries.
The world we live in now is known as VUCA in the business world. This stand for Volatility, Uncertainty, Complexity, and Ambiguity. Leaders who look to stay in front are devising strategies to change how business is done. One of the strategies includes cooperation with competition.
Why It Doesn’t Work to Resist Each Other
Every company is part of something bigger. Customers, suppliers, prospects, and competitors. When companies come together instead of fighting against one another, they improve the whole business system.
You miss out on valuable information that bigger companies are willing to share. Going to conferences that relate to your industry will prove this point. Coca-Cola Corp. has offered feedback to other smaller companies in the past.
Collaborating But Still Competitive
One of the newest collaboration strategies is to compete but still collaborate while reaching for similar goals. An example of this is the Sony/Samsung collaboration. In 2004, Sony Corp. came together in a joint venture with Samsung Electronics. They normally compete against one another, but worked together developing LCD panels and flat-screen TV’s.
Samsung made it possible for Sony to launch “Bravia,” and Samsung was able to develop “Bordeaux.” They were able to produce their own innovations in the details that the company represents. Together though, they came up with the main development aspects. The result? Doubling the combined market share of the two companies. Through working together, they were able to overcome challenges that they may not have been able to accomplish alone.
Think of what your business could do with the help of other people in your industry. You may have the opportunity to offer your client base something new and exciting through collaborating with others in your industry.
Sharing Talent Pools
Companies are likely going to have to share talented employees in the near future. Work models have been changing for quite some time. For those who have experience and knowledge, they have the ability to be freer through freelancing. This inevitable fact implies that businesses are going to have to share their talented employees.
The benefit is that the other companies will be giving people in talent pools additional angles of the business. Without compromising other companies, talent can bring forth their knowledge to make your business better.
Power in an Alliance
Research has found that there’s a need for public and private organizations to collaborate in order to solve problems. It’s not about giving away essential secrets that has made one company successful. It’s really about coming up with new ideas together. Both companies benefit, as opposed to a give and take mentality.
You don’t have to give away the fine details of the business model. You can always determine what information you’re okay with giving them. When you preplan how the collaboration will be, you’re really just gaining more power. Making alliances within your industry means letting go of the “coming out on top” mentality. That just doesn’t exist anymore.
Be Strategic about a Competitive Collaboration Partnership
While the idea of collaborating with competition might seem abstract, when you’re strategic about it, there’s much less risk. Here are some of the things you would want to do to ensure it’s a win-win partnership.
- Have a formal proposal to lay out the common objective you have planned. There should be a two-way non-disclosure statement to protect all parties.
- Share the technology and core competencies the companies have.
- Up-sell products and endorse each other’s products. If you see that your customer would benefit by having your competitor’s products, let them know about it.
- Establish performance targets and incentive-based rewards for exceeding those targets.
- Remember to expand your own competencies that are solely a part of your own company. You can share and learn in non-competing areas of each other’s business, however.
- Learn from one another.
- Consider the future. For example, maybe the company has finances you need for investing. There may even be a merger in the future. The sky is the limit.
Benefits of Collaboration
Collaboration between companies means personnel can intermingle and work together. Say the company you work with has good software development skills and you make computer hardware. This can be a match made in heaven, where you create products that complement one another. Also, any team can just benefit from additional volunteers or personnel during times when one establishment is busier than the other.
When two companies get together, they can use one another’s customer base. They can also reach a larger target market that was once not possible to reach. You may be able to reach a much vaster demographic than you did before.
Feeding Off One Another’s Ideas
When you come together with another company, you will be able to share knowledge. There are some things you are doing that could be very valuable to the other company, and vice versa. Maybe it has something to do with operations or communications. It might be something as simple as a better courier company they are using that can cut costs. When you work with another team of people, you have the opportunity to work with people who think a little differently than your own organization.
The term, “collaborative advantage: refers to the ability to form rewarding partnerships that are effective for both parties. The mutual benefit relies on being a good partner to the other company. Knowing how to establish a give-and-take business relationship has actually become part of the education curriculum because society already understands where business is going. This is important in order to collaborate in a way that is good for everyone. It’s the new way of doing business for those willing to do it.